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Nationwide implementation of smart grid technology would have "a substantial and immediate impact" on the U.S. electricity system and deliver "immense environmental benefits" by reducing carbon emissions, according to CURRENT Group LLC CEO Tom Casey.

Casey testified before the House Select Committee on Energy Independence and Global Warming last Wednesday. According to analysis performed by CURRENT, the deployment of a smart grid would produce more than $3 billion of benefits for a utility serving 1 million homes over 17 years.

While a smart grid has a number of different definitions, Casey said it is the application of readily available technology to the wires that distribute electricity to customers. That technology is composed of sensors that are attached to wires to determine whether the electricity is flowing as it should, high-speed communications to transmit that information, and software that can analyze it and determine whether there are problems, and if so, what to do about it. He added that a smart grid would also act on this analysis by correcting the problems. The ultimate goal is to allow a utility to manage its distribution grid more efficiently, require less power to be generated, create fewer emissions, and reduce the frequency and duration of outages.

Casey said that while much of the smart grid public discussion has focused on additions to the transmission (or long-distance) grid and smart meters, automating the electric distribution (local) grid is an essential element to achieving the larger objectives of efficiency and reliability.

The Electric Power Research Institute (EPRI) has estimated that a smart grid application in the United States would reduce carbon from electric power by 25%, or roughly 10% of overall U.S. CO2 emissions. "This savings," Casey said, "is estimated to have the same impact as removing 140 million cars from the road."

CURRENT, a smart grid provider, said its open-standards technology is deployed by utilities worldwide, but new rules are needed to allow the technology to flourish across the United States. "Regulatory changes will be essential to accelerate the adoption of smart grids," Casey said. "As an integrated end-to-end solution, smart grid creates value all along the utility, to its customers, and to society in the form of fewer outages and less carbon. Regulatory policy has to be structured to assure that entire value creation is included in the benefit case so that utilities can be assured appropriate rate recovery."

Casey told the committee that smart grid optimization can reduce electric generation and related carbon by up to 5% without any change in consumer behavior. He added that the case for using smart meters and other pricing systems for commercial and industrial users is strong, but the funding appropriated in the American Reinvestment and Recovery Act should also be spent on implementing smart grids.

Speaking last month at the National Association of Regulatory Utility Commissioners' Winter Meetings, U.S. Secretary of Energy Steven Chu said $4.5 billion has been allotted under the American Recovery and Investment Act to implement smart grid technology (see NGI, Feb. 23).

Casey noted that smart grid implementation could help solve the problem of global warming. He told the committee that smart grid projects are shovel-ready within 12 weeks of funding, and will create long-term, sustainable jobs for Americans.

"In addition to the obvious benefits for energy efficiency and renewables, encouraging a smart grid will also help American companies gain and preserve market leadership in what is fast becoming a worldwide market," he said. "Indeed, CURRENT and other American companies already are pursuing such international opportunities, which will create high tech jobs here at home."

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Natural Gas Intelligence (NGI), is a leading provider of natural gas, shale news and market information for the deregulated North American natural gas industry. Since the first issue of Natural Gas Intelligence was published in 1981, NGI has provided key pricing and data relied upon daily by thousands of industry participants in the U.S, Canada and Mexico as well as Central and South America, Europe and Asia.